The incident happened when about 20 gunmen from the rebel group, the Kayin National Union, opened fire on a government-owned passenger boat operating between the town of Hpa-an and Shwegoon village in Kayin State at 7:20 a.m. Tuesday, the New Light of Myanmar said.
The boat was steaming along the Thanlwin River on its way back to Hpa- an when it came under attack near Tagaung Boe village, it said.
Army troops in the area are searching for the responsible insurgents, the report said.
The KNU, the largest ethnic rebel group in Myanmar, has been engaged in a 60-year war for autonomy from the Myanmar state.